CCB International: Alibaba (09988) had a mixed performance in the fourth quarter, with the target price reduced to HK$160.6.

In the report released by Haitong International, it was stated that Alibaba Group's performance in the fourth quarter of fiscal year 2025 was mixed. Based on the SOTP valuation, the group's target price was lowered by 5%, from HK$169.1 to HK$160.6. Despite the mixed performance, the bank still believes that Alibaba's investment is solid, including stable market share of Taotian Group (TTG) and growth in structural cloud business. Therefore, the "outperform" rating is maintained. The report mentioned that to better reflect Alibaba's CMR growth, the impact of tariffs leading to a decline in cloud service revenue, increased investment in instant retail and delivery business, and slightly lower cloud business profit margin, Haitong International has reduced the group's revenue forecast for fiscal years 2026-2027 by 0.7% and 1.2% respectively, and adjusted profit forecasts by 5.2% and 2.4% respectively. A forecast for fiscal year 2028 has also been added. Looking ahead to the first quarter and full year of fiscal year 2026, the bank expects Alibaba's total revenue to increase by 6% and 7% respectively, adjusted EBITA to grow by 3% and 7%, and adjusted earnings per share to increase by 6%.